Problem 9-6AA Entries for payroll transactions LO P2, P3, P5

Francisco Company has 10 employees, each of whom earns $3,100 per month and is paid on the last day of each month. All 10 have been employed continuously at this amount since January 1. On March 1, the following accounts and balances exist in its general ledger:

1. FICA—Social Security Taxes Payable, $3,844; FICA—Medicare Taxes Payable, $900. (The balances of these accounts represent total liabilities for both the employer's and employees' FICA taxes for the February payroll only.)
2. Employees' Federal Income Taxes Payable, $7,750 (liability for February only).
3. Federal Unemployment Taxes Payable, $372 (liability for January and February together).
4. State Unemployment Taxes Payable, $2,480 (liability for January and February together).

During March and April, the company had the following payroll transactions.

* FICA taxes are Social Security and Medicare, respectively.

Required:
Prepare journal entries to record the transactions and events for both March and April. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field.)

Two things can cause a budget variance; quantity and cost. Why is a flexible budget essential for managers? What departments are responsible for quantity variances? Cost variances?   As a manager why do you think it is necessary to differentiate these causes?

Sabel Co. purchased assembly equipment for $780,000 on January 1, Year 1. The equipment is expected to have a useful life of 260,000 miles and a salvage value of $26,000. Actual mileage was as follows: Year 1 72,000 Year 2 69,000 Year 3 58,000 Year 4 49,000 Year 5 16,000 Required Compute the depreciation for each of the five years, assuming the use of units-of-production depreciation. Assume that Sabel earns $236,000 of cash revenue during Year 1. Record the purchase of the equipment and the recognition of the revenue and the depreciation expense for the first year in the following financial statements model. Assume that Sabel sold the equipment at the end of the fifth year for $27,200. Calculate the amount of gain or loss on the sale.

Data Analysis: Risk Assessment Stage: Explain how and why data analysis is used at the risk assessment stage of the audit process.  Data Analysis: Determination of Sampling Method and Audit Universe: Explain how data analysis is used in the determination of sampling method and audit universe.

The partnership of Duro, Kemp and Roth is to be liquidated as soon as possible after December 31, 2016. All cash on hand except for a $20,000 contingency balance is to be distributed at the end of each month until the liquidation is completed. Profits and losses are shared 50%, 30% and 20% by Duro, Kemp and Roth, respectively. The partnership balance sheet at December 31, 2006 contains the following.

Assets                                                             Liabilities and Capital

Cash                                        240,000            Accounts payable                  300,000

Accounts receivable              280,000            Note payable                         200,000

Loan to Roth                         40,000            Loan from Kemp                   20,000

Inventories                             400,000            Duro Capital (50%)               340,000

Land                                       100,000            Kemp Capital (30%)             340,000

Equipment – net                   300,000            Roth Capital (20%)                200,000

Goodwill                                 40,000

A summary of liquidation events is as follows

January 2017

Goodwill is written off, $200,000 is collected on account, inventory items that cost $160,000 are sold for $200,000. The accounts payable and notes payable are paid and cash is distributed.

February 2017

Equipment with a book value of $80,000 is sold for $60,000, the remaining inventory items are sold for $180,000, liquidation expenses of $4,000 are paid, a liability of $8,000 is discovered and cash is distributed.

March 2017    

The land is sold for $150,000, liquidation expenses of $5,000 are paid and cash is distributed.

April 2017

The remaining equipment is sold for $150,000, remaining receivables are wWritten off and all cash is distributed in final liquidation

REQUIRED: Prepare a statement of liquidation including safe payment schedules as required.

Paste Corporation has established new plant for the production of new product called “Diazinon”. There are two different manufacturing methods available to produce Diazinon. Either by using a process or an order base method. The assembling technique won't influence the quality or deals of the item. The evaluated manufacturing expenses of the two strategies are as per the following:

                                                                              Process base       Order base

Variable manufacturing cost per unit..................... Rs14.00         Rs.17.60

Fixed manufacturing cost per year ......................Rs. 2,440,000 Rs. 1,320,000

The organization's statistical surveying office has suggested an initial selling cost of Rs.35 per unit for     Diazinon. The yearly fixed selling and admin costs of the Diazinon are Rs.500, 000. The variable selling and regulatory costs are Rs. 2 per unit.

Required:

1. CM ratio and variable expenses ratio. If Paste Corporation uses the:

1. Process base manufacturing method.

2. Order base manufacturing method.

   II.      Break-even point in units and amount by formula method. If Paste Corporation uses the:

                        1. Process base manufacturing method.

                        2. Order base manufacturing method.

3. Margin of safety. Assuming 250,000 units are actual sales for.

1. Process base manufacturing method.

2. Order base manufacturing method.

4. Degree or operating leverage at actual sales level for.

1. Process base manufacturing method.

2. Order base manufacturing method.

Flexible Budgeting and Variance Analysis

I Love My Chocolate Company makes dark chocolate and light chocolate. Both products require cocoa and sugar. The following planning information has been made available:

I Love My Chocolate Company does not expect there to be any beginning or ending inventories of cocoa or sugar. At the end of the budget year, I Love My Chocolate Company had the following actual results:

Required:

1. Prepare the following variance analyses for both chocolates and the total, based on the actual results and production levels at the end of the budget year:

     a. Direct materials price variance, direct materials quantity variance, and total variance.

     b. Direct labor rate variance, direct labor time variance, and total variance.

Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

2. The variance analyses should be based on the standard  amounts at actual  volumes. The budget must flex with the volume changes. If the actual  volume is different from the planned volume, as it was in this case, then the budget used for performance evaluation should reflect the change in direct materials and direct labor that will be required for the actual  production. In this way, spending from volume changes can be separated from efficiency and price variances.

What is the budgeting cycle and master budget? Why should companies use a master budget?

In 1941, President Roosevelt spoke about the “four freedoms.” For many in the country, however, these did not seem to apply to all Americans. Discuss briefly how the four freedoms were received by different groups of Americans during the war. How did the four freedoms inspire many to strive for more equality?

Journal Entries and Trial Balance

Elite Realty acts as an agent in buying, selling, renting, and managing real estate. The unadjusted trial balance on March 31, 2018, follows:

The following business transactions were completed by Elite Realty during April 2018:

Required:

Use the attached spreadsheet to complete parts 1 and 3. Click on the Spreadsheet icon to open and save the Excel file to your computer. Your input into the spreadsheet will not be included in your grade in CengageNOW on this problem.

1. Enter the April 1, 2018, balance of each account in the appropriate balance column of a four-column account. The word Balance has been entered in the item section and a check mark (√) has been placed in the Posting Reference column.

2. Journalize and insert the Posting References for the transactions for April in a two-column journal beginning on Page 18. For a compound transaction, if an amount box does not require an entry, leave it blank.

3. Post to the ledger, extending the account balance to the appropriate balance column after each posting.

4. Using the balances from the spreadsheet, prepare an unadjusted trial balance of the ledger as of April 30, 2018. List all accounts in the order of Assets, Liabilities, Stockholders’ equity, Revenues, and Expenses. If an amount box does not require an entry, leave it blank.

5a. Assume that the April 30 transaction for salaries and commissions should have been $5,620. As a result, the unadjusted trial balance in (4) would  

5b. Assume that the April 30 transaction for salaries and commissions should have been $5,620. Journalize the correcting entry. If an amount box does not require an entry, leave it blank.

5c. Assume that the November 30 transaction for salaries and commissions should have been $5,620. Is this error a transposition or slide?

Soto Inc. had the following utility cost with the related activity levels for the previous months. The company thinks that the utility cost is related to the activity level.

Use the high-low method to separte the cost into its fixed and variable components and answer the following questions.

A) What is the variable cost per unit? $

B) What is the total fixed cost? $

C) At an activity level of 29 what would be the expected cost? $

Journal Entries and Trial Balance

On October 1, 2018, Jay Pryor established an interior decorating business, Pioneer Designs. During the month, Jay completed the following transactions related to the business:

Enter the following transactions on Page 2 of the two-column journal:

Required:

1. Journalize and insert the posting references for each transaction in a two-column journal beginning on Page 1, referring to the following chart of accounts in selecting the accounts to be debited and credited. For a compound transaction, if an amount box does not require an entry, leave it blank.

Portsmouth Company makes upholstered furniture. Its only variable cost is direct materials. The demand for the company's products far exceeds its manufacturing capacity. The bottleneck (or constriant) in the production process is upholstery labor-hours. Information concerning three of Portsmouth's upholstered chairs appears below:

Required:

1. Portsmouth is considering paying its upholstery laborers additional compensation to work overtime. Assuming that this extra time would be used to produce sofas, up to how much of an overtime premium per hour should the company be willing to pay to keep the upholstery shop open after normal working hours?

2. A small nearby upholstering company has offered to upholster furniture for Portsmouth at a price of $42 per hour. The management of Portsmouth is confident that this upholstering company’s work is high quality and their craftsmen can work as quickly as Portsmouth’s own craftsmen on the simpler upholstering jobs such as the Love Seat. How much additional contribution margin per hour can Portsmouth earn if if it hires the nearby upholstering company to make Love Seats?

3. Should Portsmouth hire the nearby upholstering company?

Landen Corporation uses a job-order costing system. At the beginning of the year, the company made the following estimates:

During the year, Job 550 was started and completed. The following information is available with respect to this job:

Required:

1. Assume that Landen has historically used a plantwide predetermined overhead rate with direct labor-hours as the allocation base. Under this approach:

a. Compute the plantwide predetermined overhead rate.

b. Compute the total manufacturing cost of Job 550.

c. If Landen uses a markup percentage of 200% of its total manufacturing cost, what selling price would it establish for Job 550?

2. Assume that Landen’s controller believes that machine-hours is a better allocation base than direct labor-hours. Under this approach:

a. Compute the plantwide predetermined overhead rate.

b. Compute the total manufacturing cost of Job 550.

c. If Landen uses a markup percentage of 200% of its total manufacturing cost, what selling price would it establish for Job 550?

(Round your intermediate calculations to 2 decimal places. Round your Predetermined Overhead Rate answers to 2 decimal places and all other answers to the nearest whole dollar.)

Instructions:

Prepare an income statement, retained earnings statement, balance sheet, and statement of cash flows for the year ended May 31, 2019 in good form. See examples on 3-14, 3-15, and 11-20 of the textbook. Be sure to include subtotals like current assets, current liabilities, and gross profit. I already answered the income statement, retained earnings statement and balnce sheet. I just need help on the statement of cash flows please?